Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) shares have rallied from $7.24 on May 16th to close at $8.13 on Friday, a solid 12% gain in just 2 weeks. Prior to this, the stock rallied in a similar fashion five months back on January 5th. After breaching the $8 barrier, now the next major price barrier for the company is $8.20-$8.30 range, says a report from Seeking Alpha by Victor Cheng, who believes that range is the “last resistance that prevents NOK from reaching $10.00.”
Nokia winning praises
Over the past three weeks, upgrades from various rating agencies have driven Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) shares to $8.13. Moody’s Standard&Poor and Fitch are among the credit rating agencies that have upgraded Nokia’s long term debt credit and outlook ratings. From an investment point of view, Jefferies upgraded Nokia from Hold to Buy with a price target of EUR 7.41 ($10.11). Canaccord Equity research also maintained its Buy rating on the stock with a price target of $11.00.
The Finnish company has assured its investors that it will return a part of 5.6 billion euros from the Microsoft transaction to them. Furthermore, at the annual general meeting to be held on June 17th there will be decision made regarding the ordinary dividend as well as a special dividend.
The BoD has recommended that an ordinary dividend of EUR 0.11 per share will be paid for the fiscal year 2013, and in addition the Board also proposed that in line with the capital structure optimization program, a special dividend of EUR 0.26 per share will be paid. This, according to the author, is good news for institutional investors, “as many had exited their position in NOK when the dividend was scrapped in 2013.”
Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s true value lies in its patent portfolio and mapping services. Nokia and Taiwanese Smartphone maker HTC have entered into a “technology collaboration agreement.” Even though HTC has less than 3% of market share in the global smartphone market in 2013, the agreement holds much importance for Nokia as it is a victory against Google’s Android operating system.
Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) acquired Desti on May 30, which uses artificial intelligence and natural language processing for contextual search to enhance its HERE technology. Nokia has made the right decision by acquiring the start-up to remain in competition with Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) and Yelp Inc (NYSE:YELP), believes Cheng.
Cheng states that he is closely watching the $8.20-8.30 level, and if that technical barrier is breached, “I am expecting a quick ride to $10.00 and will be loading up on call options.”